EI makes a €10 million follow-on investment in Profi
Bucharest, 18 October 2011 — Polish Enterprise Fund VI (PEF VI), a private equity fund managed by Enterprise Investors (EI), has announced a €10 million follow-on investment in one of its portfolio companies in Romania, Profi Rom Food. PEF VI controls 100% of Profi since 2010, when the private equity fund acquired the chain in a €66 million transaction. The capital increase will finance the accelerated expansion of the company through new store openings and the acquisition of smaller supermarket chains in the country.
Profi’s development plans include the opening of 6 new stores by the end of 2011 and at least 25 new stores in 2012. In addition to the development of new stores in the existing format and restructuring the existing ones, the company plans to implement a new 300-500 sqm store concept in towns with below 20,000 inhabitants. The total investment of PEF VI may rise to €100 million in the coming years.
Profi Rom Food is one of the largest food retail chains in Romania, currently operating 101 stores in 67 cities. Since March 2010, when EI took over a controlling stake, Profi has opened 37 new stores, including 19 this year. Post-acquisition, the new management restructured the existing stores, improved the assortment, raised the quality of fresh produce (including fruit, vegetables and meat), provided assisted counters in all stores and created small grilled meat and in-store bakery counters. To date the company has invested about €20 million of its own capital in new and existing stores.
Profi has enjoyed steady growth since the buyout. In 2010 sales reached RON 725 million (over €180 million) and were 21% up on 2009. Despite the current difficult conditions on Romania’s retail market, which contracted by 6% in the first 6 months of 2011 year-on-year, Profi’s sales expanded by 35% in the same period. Since the acquisition Profi has hired more than 1,000 workers throughout the country, bringing its number of employees up to 2,800.
“In little over one year since Enterprise Investors took over Profi, we have tested and improved our store format and strengthened the management team. The performance achieved so far proves the company is in good shape to step up its development. We would like Profi to open more stores each year, by accelerating the rollout and acquiring smaller independent food retailers,” commented Cristian Nacu, Enterprise Investors partner and member of Profi’s board of directors.
“We continue our plans to expand the network at a dynamic rate to deliver Profi’s ‘Cheaper, better and closer’ offer to more and more of Romania’s residents,” said Paweł Musial, general manager of Profi Rom Food. “By the end of this year we will have about 107 stores, and our target is to open at least another 25 next year and even more in 2013.”